Shipbuilders vie for Canada's $8 billion submarine contract

British and French shipbuilders are battling to see who will supply Canada with its new nuclear navy. There is at least $8 billion (Canadian; US$6.4 billion) at stake for a fleet of 10 to 12 nuclear-powered submarines along with the technical reputations of France and Britain.

Canada wants nuclear submarines to patrol both its Atlantic and Pacific coasts. But especially important is the country's vast Arctic coastline; conventional diesel-powered subs can't do the job. The issue first arose several years ago when the United States sent a ship through the Northwest Passage, which Canada claims as its own and the US says is international waters.

``The third ocean is the one that can be considered our backyard: the Arctic,'' Perin Beatty, Canada's defense minister, told the standing committee on national defense earlier this month. ``Because of its location between the two superpowers, it is increasingly becoming an arena for military enterprise.''

No matter who gets the contract, the nuclear submarines will be built at Canadian shipyards. So far, five Canadian companies are bidding for the business, even though it probably won't be a certainty until June, when the Cabinet decides on which sub to buy.

The British submarine is a Trafalgar class, which is said to cost $500 million; the French candidate is an Amethyste class, priced at $350 million. But the smaller French sub can't crack through the polar ice, while the larger British vessel can.

Price, however, could still win it for the French. Canada could buy a dozen of the French subs for the same cost as nine or 10 of the British ones.

Last summer, Mr. Beatty issued a white paper on defense calling for billions of dollars to be spent on a shopping list of new frigates, military trucks, tanks, and other equipment. Canada spends less per capita on defense than any other country in the North Atlantic Treaty Alliance except Luxembourg.

The nuclear submarine project is the most ambitious of Canada's defense plans.

``The advent of nuclear-propelled submarines,'' said Beatty, ``will make an enormous difference to Canada's contribution in the North Atlantic.''

Canada can only spend so much on defense, and choices will have to be made, says David Cox, a political scientist at Queen's University in Kingston, Ontario. ``I have no quarrel with nuclear submarines, but they are expensive,'' he says. ``The question is, does Canada need to add tanks to its European operations and does it need to beef up its militia? I would say at least one has to go, and I would pick the militia.''

Military analysts, including Gen. Richard Rohmer, former head of the reserves, say Canada will be spending too much money on submarines and not enough on other weapons. And others say the $8 billion estimate for the submarines is unrealistically low.

No matter which way the bidding ends, Canada's shipbuilding and heavy industry sectors are going to get a substantial boost from defense spending over the next decade.